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Options and Futures

Settlement Price

In the world of finance, the settlement price holds great significance. It is the final price at which a commodity is traded on a particular day. This price is determined by the exchange clearinghouse, and it plays a crucial role in determining a firm's net gains or losses, margin requirements, and the following day's price limits for futures and options contracts. In case of a range of closing prices, the settlement price is calculated by taking an average. This term is also known as settle or closing price.

Linkage

The concept of arbitrage, or the practice of buying and selling contracts on different exchanges, is a common strategy in the world of finance. For example, one may buy a co...

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Option Writer

An option seller, also known as a writer or granter, is someone who receives a premium in exchange for selling an option and is obligated to fulfill their duties when the ho...

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U.S. Treasury Bill

A bill is a type of short-term U.S. government debt instrument that typically has a maturity of one year or less. These bills are sold at a discount from their par value, me...

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Open Interest

Open interest refers to the total number of futures or options contracts that have not been fulfilled or offset. It is important to note that each open transaction has both ...

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